Economic analysis of maize dryer plants in the Punjab State

Taljinder Singh and M K Sekhon

Indian Journal of Agricultural Marketing, 2018, vol. 32, issue 2

Abstract: Drying is one of the essential step in the postharvest technology of grains, especially of maize and rice which always require mechanical drying. Proper drying is considered the biggest single factor in determining whether grain will be effectively stored without damage. To help maize cultivators to get better value for their crop, the state government has installed two maize dryer plants at Hoshiarpur and S.B.S Nagar in Punjab during 2013 and 2014, respectively. Present study was based on the objective to work out the feasibility of maize dryer plants. The results of the study indicated that benefit-cost ratio, capitaloutput ratio and share of fixed cost to capital-output ratio was less than unity which revealed that returns obtained from maize dryer was very low against per unit investment. Due to very heavy initial investment, net benefit obtained from maize dryer came out negative. The study brought out that maize dryer plant observed to be generated negative returns in the short run, but this technology may be beneficial in the long run by putting more quantity of maize to be dried up through maize dryer. It was worked out that the net benefits of the maize dryer can be increased to Rs 201.11 and Rs 394.48 thousands by running the maize dryer at full capacity in S.B.S Nagar and Hoshiarpur. The payback period under full capacity utilization calculated about 10 and 12 years which indicate the capital investment of the plant may be covered in 10 and 12 years, respectively. However, the payback period of the maize dryer can be changed to 10.16 and 9.92 years by increasing the quantity of maize to be processed by 7.5 thousand tons and 11.25 thousand tons in S B S Nagar, while at the same quantity the payback period of maize dryer plant in case of Hoshiarpur district came out to be 11.85 and 11.57 years, respectively. In this regard suitable policies should be framed to encourage farmers for getting their produce to be processed to get more remunerative price of their produce.

Keywords: Crop; Production/Industries (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:ags:injagm:399576

DOI: 10.22004/ag.econ.399576

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